Updated over 10 years ago on . Most recent reply
Starting a business entity for flipping Houses
Several questions I have.
-Should I start my business as an LLC or a S-corp? and why? I will be the only owner for now, I will probably do around 3-4 flips this year, and I would like to protect my assets in the event anything went wrong. Let me know if you want any other specific info to answer this question.
-Are there any good books or web sights that go into detail on how taxes on real estate work? I know the basics on capital gains taxes. I'm more looking for what can and can not be written off. As well as legal ways to avoid as much taxation as possible. I like every one else would like to keep as much of my hard earned money as possible.
Most Popular Reply
For my clients that flip houses, we often try to keep it simple until it's feasible to go the S-Corp route. Start with an LLC and when you expect to earn around $50k net operating income in any given year, that's when you should be thinking about filing an S election.
That's how you set up S-corps by the way - you either first create an LLC or C-Corp, and then file a form to elect S-Corp status. So you can't go straight to S-Corp if that makes sense.
Hope this helps.